Power Prospecting
Page 5
Keeping track of potential clients and maintaining accurate pipeline categories takes organizational skill and discipline. Nevertheless, it is time well invested. Sales professionals and organizations that maintain accurate pipeline categories and terminology win more sales.
Sales managers and executives are tasked with making decisions that have enormous impact on sales organizations. Too often, sales leaders are not equipped with sufficient information to manage with the force of facts. They frequently make the mistake of basing decisions on gut feelings or emotions. Pipelines are often misunderstood and, as a result, forecasts are unreliable and inaccurate. Without available data and accurate reports, sales people and leaders rely on guesswork instead of homework to make decisions.
Several reports are critical to the success of sales organizations including:
1. Activity Reports
2. Pipeline Velocity Reports
3. Forecast Reports
4. Win/Loss Reports
5. Account Briefing Reports (For complex sales)
The two most essential reports for measuring and maintaining healthy pipelines are Pipeline Velocity Reports and, for complex, committee-based sales, Account Briefing Reports.
Pipeline Velocity Reports
Patrick Henry International helps clients customize Pipeline Velocity Reports to track the overall health, value, and progression of sales pipelines. Using data from reputable sales automation and CRM programs, we help create customized reports that trace the time it takes to progress prospects from one pipeline category to the next, i.e., the velocity. For example, by using Pipeline Velocity Reports, a manager can determine the exact number of qualified accounts, hot prospects, and pending sales in an individual or overall pipeline and track the exact activity and progression of those accounts on a weekly, monthly, or quarterly basis.
Pipeline Velocity Reports provide sales representatives, managers, and executives with the following capabilities:
• Determining exact sales cycles (no more guessing)
• Measuring actual individual and team performance
• Managing and coaching with factual pipeline data
• Identifying precise pipeline strengths and vulnerabilities
• Establishing realistic prospecting goals and standards
• Identifying specific individual and team skill deficiencies
• Establishing fair and practical territory sizes and boundaries
• Determining percentages of change (velocity) between categories
• Creating accurate sales forecasts and revenue projections
Armed with pipeline velocity data, sales managers and executives measure the progression and value of a pipeline, manage performance on an individual and team basis, and create consistent, accurate revenue projections.
Sample Pipeline Velocity Reports
Figure 3.3
Account Briefing Reports
Account briefing reports are used to manage complex, committee-based sales that involve high-dollar products and multiple decision makers. Account briefing reports help sellers and managers work collaboratively to analyze high-dollar accounts and develop corresponding selling, presenting, and competitive strategies.
To manage complex, high-value, committee-based sales, Patrick Henry International recommends a process called Sonar (Strategize, Organize, Navigate & Respond). In addition to sales force automation and CRM services, Sonar facilitates information gathering and evaluation that is essential to winning complex sales. The Sonar process transforms acquired data into a comprehensive briefing report that calculates critical decision factors including: needs resolution in comparison to competitors, decision making power by title or department, value charts that measure needs resolution in comparison to competing pricing, available communication channels, qualification logistics, and related data necessary to evaluate large accounts, identify strengths and weaknesses, and overcome potential vulnerabilities.
Sonar briefing reports simplify complex sales by identifying:
• The most critical needs of the account
• Departments involved in the sale
• Competitors involved in the sale
• Analysis of fulfillment of the top ten needs in comparison to competitors
• Top decision makers by department and order of decision-making power
• Funding, qualification, and decision process logistics
• Competitive analysis and SWOT (Strengths, Weaknesses, Opportunities, Threats) data
Using the Sonar process, sales and marketing teams work collaboratively to design competitive strategies, develop tactical presentation content, “response block” product deficiencies, construct overall account stratagems, and effectively plan, forecast, and close complex sales.
In Summary
Successfully managing sales leads, relationships, and processes means that sales individuals and organizations must use consistent pipeline terminology, a common sales language, and a reputable sales automation or CRM program.
Highly successful sales managers and executives build effective organizational models and reporting systems. With modern phone systems, CRM programs, accurate pipeline data, and account briefing reports, sales organizations retrieve the necessary information for creating accurate reports, making intelligent decisions, and winning more sales in complex sales environments.
Sample Account Briefing Report
Figure 3.4
1. Some sales do not encompass the entire pipeline process. This process is a model, not a rigid formula. For less complex sales, or for sales with shorter sales cycles, categories can be modified and condensed to reflect market and industry specific sales cycles.
Chapter 4
Defining Your Target Market
Better to return and make a net, than to go down to the stream and merely wish for fish.
—Chinese Proverb
The Bay of Pigs fiasco in 1961 is a classic example of not having a clear and definitive objective when taking action. Tired of the growing threats of Fidel Castro and his communist acolytes, President John Kennedy agreed to support an invasion of Cuba by anti-Castro Cuban exiles. Kennedy initially agreed to provide American forces to support the exiled Cubans’ attempt to overthrow Castro and install a democratic government. Regrettably, like many well-intentioned politicians, Kennedy allowed his fear of international censure to sway his better judgment, and at the last minute, withdrew U.S. forces from the invasion. The President’s last minute removal of naval and air support left the Cuban exiles abandoned on a beachfront to face Castro’s troops alone. Outnumbered, outgunned, and betrayed. Castro made quick work of the freedom fighters at a tropical bay now known infamously as The Bay of Pigs. Every anti-Castro freedom fighter was either killed or taken captive.
Kennedy’s political calculations undermined his objective to rid the world of a dictator, Fidel Castro, and led to an episode that embarrassed not only his administration, but also his country.
Identifying Prospecting Objectives
President Kennedy’s blunder at The Bay of Pigs illustrates the importance of having a clearly defined objective and taking decisive steps to achieve that objective.
Repeatedly, I encounter sellers prospecting without first identifying and defining their target market. Without any pre-account planning or preparation, many sellers just pick up the phone and start “dialing for dollars.”
There are sellers who have concluded that cold calling doesn’t work. In fairness, this is a correct conclusion when it is done the wrong way. Doing it the wrong way will simply reinforce the pre-conceived notion that it is a waste of time. It must be done correctly.
I cannot over-emphasize the importance of defining a target market because sellers who don’t take the time to clearly identify the
ir target market prior to cold calling waste time, money, and effort on leads who will never purchase. Without a well-defined market, salespeople invest time cold calling with only diminishing returns, and severely limit their opportunities for success. The key to being successful is finding a target-rich environment.
Caution! Poorly defined markets are like poorly defined targets. If you don’t know what you are shooting at, chances are you won’t hit it.
To conduct a successful teleprospecting campaign, a seller should first define his or her target market by differentiating high probability buyers from low probability buyers. High probability buyers meet certain criteria that make them likely to purchase your goods or services. In other words, they have certain credentials and characteristics that make them probable buyers: whereas, low probability buyers do not have characteristics that make them likely to buy.
High Probability Buyers
High probability buyers are potential customers who match optimum demographic and geographic qualifications. In other words, they are the most likely accounts to purchase your products or services. High probability buyers maximize return on investment for the TIME (Time, Investment, Money & Effort) spent cold calling. They have certain characteristics that lead you to believe they both need your product or service, and have the ability to buy it.
Low Probability Buyers
Low probability buyers are potential customers who match minimum demographic and geographic qualifications. In other words, they are the least likely accounts to purchase your products or services. Low probability buyers minimize return on investment for the TIME (Time, Investment, Money & Effort) spent cold calling. They could potentially become customers, but they do not have the characteristics that lead you to believe they are an ideal fit for your good or service. Not big enough, not wealthy enough, wrong location, not enough employees, etc., are potential examples of reasons particular accounts would be low probability buyers.
By identifying and distinguishing high probability buyers from low probability buyers, sellers avoid making the beginner mistake of spending time searching for prospects who cannot or will not purchase.
The Point? Power prospecting is based on the premise that quality calls are preferred to quantity calls. Effective cold calling strategies focus on preliminarily qualifying contact lists and identifying high probability buyers—prior to cold calling.
Demographics
There are two factors that are traditionally used to define a target market: demographics and geographics.
Since you want to identify the market that is going to give you the largest return on investment (ROI), the first step is matching favorable demographics with product or service capabilities. Cerebral sellers calculate return on investment by dividing the profitable dollar amount of the sale by the amount of time invested to get it.
To maximize return on investment, sellers should prioritize prospecting time spent with high probability buyers and invest the majority of their efforts with the candidates who have the greatest purchasing capability. “Cherry picking” is smart business, and there’s nothing wrong with it. Sharp business people go after low hanging fruit by matching demographics to prospects who will most likely need the offered goods or services and who have the ability to buy it.
Demographics: The characteristics of human populations and population segments, especially when used to identify consumer markets. (The American Heritage Dictionary, 3rd Edition).
Good sellers identify markets that have the demographic numbers that match their capabilities. For example, if you are selling roping equipment to western tack stores, you probably don’t need to worry yourself to death if your potential stores are not Fortune 500 companies. If, on the other hand, you are selling million dollar accounting systems, you will want to focus your energies on prospects that are at least Fortune 1000 companies.
The most frequently used business-to-business sales demographics are:
1. Gross sales (for example, $25 million)
2. Number of employees (for example, 200)
3. Number of years in business (for example, 5)
4. Company ranking (for example, one of the top 100 fastest growing businesses in Texas. A Fortune 500, 1000, etc.)
For business-to-consumer sales such as life insurance agents, real estate agents, and bank loan officers, you should, obviously, establish a target market based on demographics specific to your industry. Examples of business-to-consumer demographics might include:
1. Household income
2. Personal gross income
3. Age
4. Sex
5. Married or single
6. Credit rating
It is critical to narrow the definition of your target market from broad classifications to specific definitions. For instance, you should fine-tune a statement such as “All companies that could use our product or service” to “All companies with more than 100 employees that could use our goods or services,” or “all companies that generate more than $20 million in gross sales,” etc.
In a major metropolitan area, I once purchased a chamber of commerce directory in order to sell sales training. As our team began calling, our “hit” ratio was unbelievably low. After hearing “not interested” a few hundred times, we decided to bag the list because it was just too broad. I called a technology association located in the same city and purchased their directory. We went through the list and identified the exact demographics we were looking for: companies grossing a minimum of ten million in sales and operating a sales force of at least twenty-five representatives. After our analysis of our new demographic standards, our cold call hit ratio quadrupled based on the changes we made.
Large businesses or companies with sufficient funding will find it worthwhile to hire professional demographic research specialists who use hard data to identify specific market niches. Professional Geographic Information System (GIS) services locate demographics that match exact market specifications and create sales maps, potential client maps, customer maps, and demographic data lists. Such professionals determine buying patterns by county, voting district, zip code, or other geographic parameters and create a profile for your business to target which consists of existing ideal customers, vendors, or distributor demographics applied to other counties, voting districts, or zip codes that share the same demographics. These services provide businesses with the maximum ammunition to penetrate their target markets.
Geographics
Geographics deal with locations such as zip code, city, county, state, territory, province, or country. For example, in most industries you should probably avoid cold calling Bangladesh. If you are a traveling life insurance agent, you don’t want to cold call areas more than 100 miles away. If you are selling long distance services that cater to metropolitan needs, you want to find geographic locations that match your capabilities and product focus.
Geographic data can also be used for “blitzkrieg” tactics when a seller targets a specific sales territory. Territories comprised of a high density of existing customers are easily identifiable with geographic data. Once identified, specific sales strategies can be implemented to exploit a large referral base in a geographic area. “Beachfront” techniques can be used to blanket areas that have large numbers of potential or existing clients.
Target Market Chart
Figure 4.1
The Point? Use demographic and geographic data to preliminarily qualify potential cold calling lists and fine-tune prospecting strategies.
Target Markets
I am currently on the board of directors of a nutritional supplement company in Salt Lake City, Utah—the Mecca of the nutritional industry. I was initially involved in their business as a sales consultant at a time when they were scrambling to get their supplements into health food stores and fitness centers. They had established thriving businesses
in Japan and Thailand but could not seem to gain a permanent foothold in the United States. Upon researching their market, competitors, and existing clients, I discovered that their definition of a target market was too broad. They were using contact lists that included anyone and everyone involved in the nutritional industry.
As I scrutinized the data they were using to target accounts, it became apparent that a large percentage of their leads were multi-level marketers, many of whom were individuals selling a single line of products out of their garages or home offices. These individuals were not their appropriate target market. Another large percentage of their leads were the hundreds of GNC stores seen in every mall across America; however, because most GNC store decisions are made at the corporate level, it was a waste of time to call each store individually.
In addition to dietary products, this company also provided on-site nutritional analysis services. For that reason we decided to initially target accounts that were easily accessible from Salt Lake City: mid-western and western states. Once we established a strong presence in the west, we then directed the business eastward.
When we initiated our prospecting program, we narrowed our target market to the following demographic and geographic parameters. Targeted accounts had to meet these criteria:
1. Have been in business at least one year (stability, established clientele, etc.)
2. Be located west of the Mississippi River
3. Have a “brick and mortar” retail store (versus a home-based business)
4. Be locally owned and operated (non-chain stores)
We established a call center to cold call each of our targeted accounts and the results were phenomenal. Sales skyrocketed. Once we restricted our efforts to high probability, strategically profiled accounts, sales increased so exponentially that the company could barely keep up with shipping and manufacturing demands—a problem they were happy to deal with.